For businesses, a private blockchain is a route to take. It gives companies the ability to restrict the view to certain people or companies and it eliminates the cost of paying per transaction.

In its simplest definition, blockchain is a public, fully transparent, a digital ledger that chronologically records transactions made in cryptocurrencies. There is no central authority (e.g. traditional financial institutions) and no single party can change records. And while the Bitcoin craze may have brought blockchain to the forefront of consumer radar, it’s clear that blockchain is the true disruptor and that we have only begun to scratch the surface of its potential.

Right now, blockchain offers a number of business benefits in terms of transparency, security, collaboration and network availability. Despite these clear benefits, there are some commonly held misconceptions about blockchain that are preventing companies from realizing its true potential.

Myth #1: Blockchain Is Only for Large-Scale Projects

Transparency is one of the most touted benefits of the blockchain and can be applied to any type of system, ranging from large corporations to any database, website, etc. Traditionally, it’s extremely easy for database administrators to modify or alter information. It’s naive not to question that the qualification of a product in a marketplace is true or if the comments are real. Blockchain provides a key value in this aspect independent of the volume or complexity of the data.

Because blockchain is a decentralized system in which several nodes are used, the possibility of information alteration is much lower than with a centralized environment. Of course, this depends on the number of nodes and on the type of transaction validation algorithms, but in general, it’s valid to say that blockchain with a suitable configuration is much more difficult to corrupt than any traditional system. Even for smaller scale projects, a private blockchain with fewer nodes is harder to break than traditional systems.

Myth #2: Blockchain Infrastructure Is Expensive

The cost of blockchain infrastructure is largely dependent on public vs. private blockchain. Public blockchain means that there is no possibility of restricting access. Here each transaction requires payment, thus eliminating the cost for infrastructure. However, for medium and large size companies this option could end up being expensive, considering the number of transactions that would occur every day.

Private blockchain requires a company to maintain its own nodes and servers, but eliminates the cost per transaction and allows restricted access. In order to set up a private blockchain about five nodes are needed to preserve security. This would cost around $300 a month to maintain.

For businesses, a private blockchain is a route to take. It gives companies the ability to restrict the view to certain people or companies and it eliminates the cost of paying per transaction.

Myth #3: Blockchain Is Difficult to Implement

Blockchain technology is admittedly not a simple implementation. But nowadays there are several tools, development frameworks and thousands of applications working to simplify and automate the user experience. While it is true that conceptually the algorithms and the cryptography may be complex, this does not mean companies should shy away from implementing the technology. It’s entirely possible to easily work within blockchain without 100% understanding of the mechanisms below the hood.

Do not let any of these misconceptions prevent your company from exploring the ways in which blockchain technology can drive business value today. While the long-term impact of blockchain is not easy to predict, the technology has already demonstrated its capacity and functionality. As the architecture improves, the impact of blockchain will only grow.

Authors

Sebastian Martinez is the head of Blockchain Lab at Nisum, a global business and technology consulting firm. In his role, Sebastian works with partners across industries to further develop and mainstream blockchain technology.

One Comment

Haris Mumtaz

We cannot use Block chain Technology on everywhere.
Lets take an example of buying a house.
“Richard” who lives in NYC is going to sell his house using blockchain network which has a smart contract related to his transaction.
“Dev” who lives in Sweden and mostly come in NYC for his business, is finding house in NYC for purchase, he came to know that “Richard” is selling house so, “Dev” purchased house from “Richard” on block chain network.
hey.. but wait o.O
How “Dev” verify that owner of the house is really “Richard”?
What if “Richard” is thief and sold someone else house to you? Does smart contract verify this with authorities?.
What if “Richard” refused to give you owner ship of the house? where “Dev” will go? which third party/Government/authorities can “Dev” claim that he purchased house from “Richard”?
Does blockchain verify the ownership of the house?

Like above There are so many questions can be raise. blockchain cannot solve every problem in the real world because its main purpose is to create a trustless network where no one trust anyone but a smartcontract. No third person can guaranteed that your payment/transcation will be return to you if any fraud has occur.

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